How should an ASC define its wants, needs and desires?

Whenever you start the prepare to sell process or even a little before you need to understand the physician owner’s and the ambulatory surgery center company’s wants, needs and desires. This will help you in a couple of ways. It will help you get a handle on how you can tell your story or in other words sell your surgery center, the strategic position of the surgery center in the market place as well as understand what you need in a new partner. Additionally, know what you want out of a ASC sales transaction. We can discuss some of the typical wants, needs, and desire but this is mostly very center and owner specific.

We ask each surgery center partner what they want to see in a buyer and what they want out of a sale of their surgery center. This helps get a handle on the questions, but also helps with physician buy in.

We want to take a look at the thought process in a more strategic fashion. What we do if we are brought in early enough in the decision making process is to recommend doing a SWOT (Strength, Weakness, Opportunities, Threats) analysis. There are others that you could use to get to the same place, but it is the one most of us have heard about and it is fairly easy and straightforward.

A SWOT analysis guides you to identify the positives and negatives inside your Ambulatory Surgery Center business (S and W) and outside of it in the external environment (O and T). This will help you to develop a full awareness of your situation, which will help with creating a plan and making the decision. Do you hold or sell, and what is your path forward if you sell or hold?

You can list internal and external opposites side by side. Answer these simple questions: what are the strengths and weaknesses of your physician group, your ASC, your market, and your efforts or actions, and what are the opportunities and threats facing it?

Some of the elements typically found in a SWOT for a surgery center:

Strengths

  • Young engaged partners
  • Multi-specialty case mix
  • Well paying long term contracts

Weaknesses

  • Low volume
  • High Debt
  • Disengaged partners
  • Low paying contracts
  • Over built center

Opportunities

  • Ability to take on more cases or expand
  • Improve payor contracts (e.g. an ASC that sold with payor contracts at 100% of Medicare. This was a huge buying point for the strategic buyer because it was an easy opportunity to increase revenue shortly after they bought the center.)
  • Recruitable surgeons in the market
  • Lower expenses
  • Improve business best practices
  • Internal cases that can be brought to the center
  • Able to establish a direct to patient marketing program

Threats

  • Competing Hospitals
  • In office procedural room
  • Competing ASCs
  • Fractured partnership/disgruntled partners

The major threat to success in the SWOT is “the competition.” So it can help to think of the “competition” in a broad sense as you consider threats to your success.

We would look at needs, as in a buyer that could help shore up weakness and threats as well help execute and take advantage of opportunities. For example, in one surgery center that we worked with a hospital health system kept selling us on their ability to leverage their contracts etc. While that is great, in reality we need help with case load recruitment-more docs, thus unless they can prove that they can help with case load recruitment that does not fit what the center’s needs are.

If you are a well-oiled, well-run larger surgery center, more often than not you just need a solid partner that can pay the most…right?

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Category: Selling My Ambulatory Surgical Center
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